Nice to hear, thanks for posting JayRiggs.
Printable View
Aha! Perpetual have been selling down suppressing the s/p; sub 5% now.This will appear on the NZX first thing tomorrow.
http://www.theaustralian.com.au/busi...32a46d71f1e6c3
"Morningstar told clients to shun the up to $1.1 billion float, deterred by the price and lack of competitive advantages"
What is interesting is that Inghams is being sold at a lower PE than Tegel... and they still think the price it is to high...
Rumor has it Inghams has been repriced at 12.0 forecast net profit or $3.15 a share, which is lower than what TGH was sold to investors at.
"STREET TALK Nov 2 2016 at 8:06 AM Updated 1 hr ago
Inghams initial public offering repriced to 12 times
Inghams initial public offering has been repriced, fund manager sources told Street Talk on Wednesday morning. It's understood the deal was covered at 13.5 times forecast net profit, however private equity owner TPG is seeking to ensure a strong aftermarket. The institutional bookbuild will open on Wednesday at a fixed price equating to 12 times forecast net profit or $3.15 a share"
http://www.afr.com/street-talk/ingha...0161101-gsfv89
It's paywalled, Balance.
Give us a clue?
I'm reading $3.15 and that vendors are now keeping 60% of stock rather than selling up to 70%. FF div 5.7%
Comment from Sydney Morning Herald on Inghams IPO - comparisons with Dick Smith and Goodman Fielder are never too healthy for an IPO... Baiada (who own the Steggles brand) are also noted as well as the dependence of duopoly customers in grocery (Coles and Woolworths in Australia and Countdown and Foodstuffs here) and of course KFC which will make it hard to grow earnings.
http://www.smh.com.au/business/comme...04-gshwtd.html
Despite this further downward revision, Ingham is currently at $3.13 a share... at least Tegel started with a bang... so now trading under 12x profit... clearly they are not expecting much growth for the big player...
Could Tegel be in the same basket? (just a thought...)
Flop initially on opening day has turned into more of a flap now that ING is at $3.29.
TGH has more growth potential than ING imo and this will be shown in the next few years - exports, added value products and Australia. In fact, TGH is already successfully building on its export markets (17.5% of sales) while Ingham is 'planning' to ramp up its exports (2% of sales) after its IPO.
http://www.theaustralian.com.au/busi...c0f4abc9eeb834
Competitive edge : New Zealand is unique in the world in being free of the three major exotic avian diseases – Avian influenza (bird flu), Newcastle Disease and Infectious Bursal Disease (IBD) – which makes it one of the healthiest places to raise chickens.
Will take the next two years for the results to show through.
and from http://www.afr.com/markets/chicken-industrys-solid-economics-make-tegel-inghams-hearty-but-bland-fare-20161020-gs7ek5
The $1.3 billion to $1.5 billion Ingham's float means local investors will soon have two listed chicken processors to peck at.
Ingham's is the dominant poultry business in Australia, which is one of the world's biggest consumers of chicken on a per capita basis. Indeed, Australians already eat so much chicken – around 40 kilograms each a year – the earnings growth prospects for Ingham's are linked largely to its ability to cut costs and lift productivity.
The other big poultry stock, New Zealand's Tegel Group, which listed in May, delivered a soft trading update this past week blaming weak pricing. Tegel confirmed its prospectus forecasts are not in doubt, but the stock is trading below its offer price at $NZ1.51. Tegel, investors would recall, listed at the bottom end of the IPO range carved out by its brokers at $NZ1.55 apiece.
But for some investors, massive volumes and slow growth are desirable – at the right price.
Rabobank's senior animal proteins analyst Angus Gidley-Baird says that unlike red meat, the Australian poultry industry offers the processor almost total control of production and supply.
A typical poultry operation needs three generations to breed up the numbers to rear the generation of birds that will be sold for meat. Chickens are grain-fed, so they are not vulnerable to vagaries of weather cycles. Aside from fish and seafood, chickens have the leanest feed conversion ratio, meaning they consume around 1.6kg to 1.8kg of feed to generate 1kg of body weight, versus 7kg to 9kg of feed for grain-fed beef.
Future growth
Observing how the industry has lifted volumes since the 1970s, the Rabobank analyst sees future growth in the processor's ability to grab a greater share of wallet through higher-margin prepared products, and aiming for a greater share in niche export markets.
"What they've seen in terms of growth has been phenomenal but we can still see 3 to 4 per cent growth, which is probably better than most other protein industries," he says. "With 95 per cent of their production going to the domestic market there will reach a time where the consumer has enough chicken in their diet."
In 2015-16 chicken meat production rose by 3 per cent to 1.15 million tonnes and is forecast to rise 4 per cent this year to 1.2 million tonnes, according to ABARES. Average carcase weight is unchanged over the past five years at around 1.86kg a bird, but this is 50 per cent higher than in 1975-76, and 30 per cent higher than in 1995-96.
Chicken's success is in its affordability and its adaptability. "It is the cheapest protein, it lends itself well to most cuisines, chicken will accept most flavours, and from a cultural point of view it's widely accepted by all different religions," says Gidley-Baird.
Dr Paul Aho, a United States economist who consults to the global poultry industry, says the income elasticity of meat is high. "Meat is a luxury. Rising income usually is accompanied by rising meat consumption and, of course, falling income reduces meat consumption. Even in a wealthy country like Australia the ups and downs of income are likely to have a significant effect on meat demand. The recession of 2008 reduced the consumption of all meat in the US including chicken. Total meat consumption per capita in 2016 has not yet recovered the levels of 2007," he says.
Feed, which is about one-third of the cost of chicken farming, is at rock bottom levels in line with the slide in wheat prices. Dr Aho argues that, perversely, this could be working against chicken processors.
Competing meats
"Since 2012, feed costs have declined dramatically around the world. It would appear at first glance that this would be great news for the poultry industry. Unfortunately, feed costs also declined for competing meats. Since competing meats are generally less efficient at converting feed to meat, falling grain prices helps them more than it helps the poultry industry," he says. "On the flipside, rising grain prices hurt competing meats more than they hurt the poultry industry.
"Paradoxically, high and stable grain prices are the most favourable to the poultry industry. Experience has shown that low grain prices often lead to overproduction in the poultry and competing meat industries while high grain prices make all decision makers more cautious."
In notable investor moves, industry fund AustralianSuper has pre-committed to a $150 million stake in Inghams, The Australian Financial Review has reported. Perpetual ceased to be a substantial holder in Tegel as of Monday, ASX disclosures show. The private equity firm TPG (which floated Myer and Healthscope) sees its stake go from 90.1 per cent to 31.9 per cent in the Ingham's float. A range of $3.57 to $4.14 a share has been marked out for Ingham's stock. Morningstar thinks this is too high and values the stock at $3.50 a share.
Close 144 today all time low
Chickens not flavour of the month
This obviously not going to plan for Claris - sure they planned to manage the share price up to 186 plus by Christmas
Anyone else notice from the VIL ASM prezzo.
Chicken main promotion
-
prices decreasing 16% over two years
This week at the mad butcher - cheapest I can remember.
FRESH BONELESS CHICKEN BREASTS $8.99 per kilo
When will tegel announce their first six months result? Any ideas on when they'll confirm the dividend as well. It's strange to me there was a market hault on this Australia raw meat export thing and we've heard nothing about it since. What was the point of a market hault?
http://marionbusinessdaily.com/check...nzsetgh/34257/
Checking the Metrics on Shares of Tegel Group Holdings Limited (NZSE:TGH)
Good to see tegel work it's way up in the last few days. Finally back above IPO price :)
This is the perfect vehicle/forum to share that info Balance, can you put us in the picture.:confused:
Gee - I honestly thought everyone would be following the bird flu breaking out all over Europe and now, Asia over the last 3 weeks - getting very serious and involving culling of poultry and export ban.
NZ is the only country in the world without bird flu so as an exporter, Tegel is in a prime position to capitalise on the situation.
Thanks.I have big gaps in current general knowledge; miss stuff; always have.Yes you're right ; thanks that is great for us but scary for others.
Sure is looking good T/A wise too.Ive discovered a new personality trait; cluckiness:t_up:
Yes I've noticed the rise above the 100 day MA, just happened. Some are probably waiting for a 3 trading day confirmation to be sure. Winner winner chicken dinner !...what you doing with this one Winner 69 ?
Thankfully I always wait for 3 trading days of a confirmed break above 100 day MA so didn't buy. Just got back to the office, $1.33 !!!!! What the heck was in the half year announcement that's sent everyone running for the hills ?
So in other words the forecast was doctored and investors were sold a pup...gosh there's a big surprise, (NOT). Disc - Avoided the float because I don't trust PE floats and PE forecasts...anyone who thinks PE aren't highly motivated to issue a forecast right at the very limit of credibility hereby gets another reality check.
About time I got one wrong.
Bugger.!!!.lol.
So the IPO forecast F17 NPAT of $43m is going to be something like $33m to $41m
At least, as they proudly repeated mant times, revenues are growing strongly and will be ahead of forecast
33m to 41m is a quite a large range. Still no mention in their report about their deal to export into AU?
Only positive I can see is Tegel has a dominate place in the NZ market. I think a long hold approach will pay an OK return. The dividend is also OK and they seem to be confident in growth opportunities. I dont think there's any point selling if you bought in at the IPO.
Well it needs to be doesn't it. Profit has to be 20% higher in H2 ($18m), just to make it to the bottom of the new forecast range ! (fat hound waddles off and figures venison sausages are far tastier than chicken anyway) Is it too early to make the call that it would be a major surprise if their earnings are even capable of being in the middle of the revised forecast range ? What do others think ?
.....the spiel is in place its all geared to the second half.
I would have thought that most of TGH product is sold well in advance and that prices would have been agreed on mostly for the rest of the second halve of the financial year. Therefor with only just over 4 months to go to the end of the financial year this should be a warning sign in my opinion.
Agree 100% Forest. Could it just be that directors want the full year forecast range, (top end) to be somewhere within a not too unreasonable variation of the original IPO forecast to avoid shareholder litigation surrounding the IPO forecast ?...or is that just the natural cynic in me coming out ? (Acknowledge to a hammer everything appears to be a nail so to someone that has deep distrust of PE floats all PE forecasts are at very best "highly creative marketing exercises") Seeing as they appear top have got the first half forecast wrong what credibility if any should we attach to their second half forecasting especially seeing as there's such a wide range ? As you say its a warning sign, I couldn't agree more...
The funny thing is if you didn't know any better Tegel have made this seem like a stellar report. Just like when they had their market halt and we're talking about their signficant opportunities.
There's so many positive statements about growth in the report you do wonder if it's all lies or they genuinely believe this is a good performance.
Hmmm, not surprised. They are going to have to pull off something steller in NPD marketing to have much in the way of margin expansion. Also, selling more to export at lower margin -> not a good growth story so far.
If F16 is anything to by H2 financials are much the same as H1
Revenues $284m H1 and $$287m H2
EBITDA $36.6m in H1 and $38.0m in H2
NPAT $6.0m in H1 and $5.3m in H2
Maybe the business post IPO is leveraging heaps of things and this 'Stronger H2'17' is a real thing this financial year
But $26m in H217 (to get to $41m) must be leveraged by something.
It is possible though
Watch out what you eat plenty of chicken bones in there to choke on.
Negative $18m operating cash flow not too flash
And $16m capex etc sees $34m out of the bank in 6 months
My wealthiest client warned me off this one and I posted to that effect during the IPO process. His brother in law is in the chicken business in a huge way. Told me they sucked all the juice out of this one before floating it to the public and Joe public were going to get "plucked" Looking at negative cash flow and capex it would appear he was bang on the money.
2H forecast just a smokescreen, (in my opinion), to try and improve what are dreadful optics with this float.
If I may, I'll bring up what I posted nearly exactly 8 months ago...
Today's annoucement was an absolute disaster, there is not much other words I can use to describe it (and what makes it worse is how they seem to 'brush it off' despite huge misses)
I remember the days when questions of "is it worth $1.95 or $2?" (or words to that effect) were being thrown around on this very form... hopefully for the holders they can one day throw these words around (and not replace the dollar sign with the cent sign...).
I am quite sure they were buying all day back at the $1.5x mark as well ;)
Well - the promoters won't be selling for a while yet
Need to wait until after the full year now I think the rules are
Nah this isn't the next Dick Smiths, and I was openly talking about what was gonna happen to Dick Smiths within 6 weeks of the P/E firm *buying* it - the plan was that obvious. I like to think I know a Dick Smiths when I see one.
Tegel had the normal P/E job done on it, plus it is in a cyclical industry that isn't too far from it's cyclical low.
I suspect I'll be a buyer at around 80 cents midway through next year, if not too much else changes. Still not excited on price, growth outlook only steady, industry downturn still playing out. A couple really basic questions to ponder :
Were you a buyer of what Dick Smiths were selling, and were they a "best of breed" supplier? (early days P/E ownership : dvd's, game dvd's, software in a box, hobbyist gear, Tv's. listed ownership : a ton of Dick Smiths branded junk that nobody wanted).
Are you a buyer of what Tegel are selling, and are they a best of breed supplier?
The above two questions are NOT an investment case in and of themselves, but they are the first clue that this is not the next Dick Smiths.
Reputation on the line, you heard that here first :)
Agreed and it is a really long and tough gig to get any compensation, as many learned with the Feltex fiasco. Private equity floats...might as well run for the hills.
http://www.msn.com/en-nz/money/marke...cid=spartandhp
Company complaining about rising transport costs today...hmmm, I would have thought diesel costs were still pretty reasonable and not that far off cyclical lows ?
I think investors are going to lose some more feathers with this pup. Why would anyone believe their 2H forecast after their 1H fiasco ?
It wouldn't surprise me to see them under $1 sometime next year when the real truth about the companies current profitability finally comes out.
They start shipping fresh stuff to Australia in H2 according to the presentation
And don't forget about the new contracts won during H1 will have a full half year impact
And you never know what the Phillipines could bring in
Winner already has his little rolled turkey breast in the freezer awaiting Christmas - so that won't add anything to H2 sales. Hopefully It was a H1 sale for Tegel and not one they sold to the supermarket in H2'16 ha ha
Craigs have a T/P.now of $1.60. In a way comparable with AIR (when fuel drops ,comp and vol increases) , feed prices have dropped and chicken vol jumped and prices down.How long this domestic pricing pressure lasts is the question; this may impact exports as well. Almost sold but holding for now.
Relevant event being disclosed: movement of 1% or more in the substantial holding
Date of relevant event: 16 December 2016
Date this disclosure made:19 December 2016
Date last disclosure made:14 October 2016
Substantial product holder(s) giving disclosure
Full name(s): Commonwealth Bank of Australia
Summary of substantial holding
Class of quoted voting products: Ordinary Shares
Summary for Commonwealth Bank of Australia
For this disclosure,--
(a) total number held in class: 26,902,615
(b) total in class: 355,906,183
(c) total percentage held in class: 7.559
For last disclosure,--
(a) total number held in class: 21,647,008
(b) total in class: 355,906,183
(c) total percentage held in class: 6.082
Almost back to (in Snakk lingo that is) pre announcemt price
Might even be a decent price when full year ends so they can get out. Nt going to plan so far but they'll get there
Yay. For once my fear of crystallising a loss and delaying an awful decision has paid off atp:scared: Phew!.
never ever on panic mode.
I always sell companies that do not achieve what they forecast they will do.
In TGH's case it was their own figures,not some broker's forecast.And that means they have no credibilty with me.
Gone.!
Yes i agree esp re credibility; this is generally the assertive action to take. I do note esp in aus the response is ruthless to undershooting and stocks can be also oversold. The maxim of; one bad announcement is followed by a few more, motivates the get out actions.
Each day in every way I'm getting better and better at selling..... each day in every way I'm getting better...
That's investing. Trading though is different. Good buying last week. Now just to judge the time the sell.
Yeah ballsy stuff 777 good luck to you:cool:.. Ive saved 10 c share atp by holding.
https://www.nbr.co.nz/article/tegel-...ms-jr-p-198203
Sounds like Inghams are basically dumping?